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On Friday, Piper Sandler adjusted its outlook on Cooper Companies (NASDAQ:COO) shares by reducing the price target from $120.00 to $115.00. The firm retained its Overweight rating on the stock. According to InvestingPro data, Cooper Companies, with its current market capitalization of $18.2 billion, is trading near its 52-week low, showing a -14.6% return over the past six months. Analysts at Piper Sandler made this decision following Cooper Companies’ first fiscal quarter results, which revealed a record gross margin percentage that helped to counterbalance a slight shortfall in revenue and additional foreign exchange headwinds.
Cooper Companies announced a modest organic revenue growth of 5%, reporting $965 million against the anticipated $978 million. Nevertheless, the adjusted earnings per share (EPS) of $0.92 surpassed the consensus estimate of $0.91. Despite the revenue missing the mark, the company’s guidance remained unchanged. InvestingPro analysis reveals the company maintains a strong gross profit margin of 67% and has achieved a revenue growth of 7.15% over the last twelve months. The company’s overall financial health is rated as "GOOD" by InvestingPro’s comprehensive scoring system. Piper Sandler suggests that to reach the midpoint of the guidance, Cooper Companies will need to expedite revenue growth, which could be challenging due to tougher comparisons in upcoming quarters.
The research firm remains optimistic, citing several factors that could mitigate the perceived revenue dip in the first fiscal quarter. These factors include strength in January and February, expansion efforts for the MyDay product in new geographical areas, and an absence of disruptions in private label offerings. Additionally, Piper Sandler anticipates that the margin strength demonstrated will continue.
After the earnings report, Cooper Companies’ stock experienced a 5% decline in after-hours trading due to the revenue miss. However, Piper Sandler believes that this sell-off may be temporary. The firm’s analysis suggests that earnings per share estimates might not need to be adjusted, and there could potentially be an upside from foreign exchange considerations. The current valuation of Cooper Companies’ stock is near multi-year lows, trading at approximately 20 to 21 times the next twelve months’ projected earnings, based on after-hours trading levels. InvestingPro data indicates the stock currently trades at a P/E ratio of 46.26, with analyst targets ranging from $90 to $125. Piper Sandler reaffirms its Overweight rating and adjusts the price target to $115, signaling confidence in the stock’s potential for recovery. For deeper insights into Cooper Companies’ valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Cooper Companies reported its first-quarter earnings for fiscal year 2025, achieving a non-GAAP earnings per share (EPS) of $0.92, which aligned with analyst projections. However, the company posted consolidated revenues of $965 million, slightly missing the forecasted $979.7 million. Jefferies adjusted its price target for Cooper Companies from $115 to $110, maintaining a "Buy" rating despite the revenue shortfall, citing confidence in the company’s market position and prospects. Needham, however, reaffirmed its Hold rating, noting the revenue miss was due to weaker sales in certain segments, although Cooper Companies exceeded EPS estimates by one cent.
KeyBanc maintained a Sector Weight rating on the stock, highlighting the company’s steady organic growth guidance and slight upward adjustment to EPS forecasts. The company’s Sphere segment grew by 3%, while the Toric and Multifocal segments each saw a 10% increase, partially offsetting the overall revenue miss. Cooper Companies has set its FY2025 revenue guidance between $4.08 billion and $4.16 billion, expecting organic growth of 6-8%.
The company is also focusing on capital allocation strategies, prioritizing debt reduction and expanding capacity for its CooperVision segment. Analysts and investors are closely monitoring Cooper Companies’ performance, particularly the anticipated stronger results in the latter half of the fiscal year and the potential benefits from foreign exchange rates not yet factored into the guidance.
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